Moody’s Investors Service has upgraded both the global scale and national scale ratings of the City of Joburg.
The global scale rating has been raised from Baa3 to Baa2, the same level as the sovereign rating while the national scale ratings has been raised by four notches up from A2.za to Aa1.
The City’s group communication and marketing officer, Nkosinathi Nkabinde, said in a statement that global scale of Baa2 was the highest possible rating that could be achieved by institutions with the best credit quality in the country.
“The City is the only Metro to have achieved such a feat of a global scale rating upgrade in the current round of rating reviews,” he said.
Executive Mayor Parks Tau said the successes and vote of confidence in the City demonstrated by Moody’s did not just happen. He said the accolades received were an affirmation of the correctness of the strategies in managing finances.
“We identified financial resilience as a priority for the City, set a team to put together the City’s Financial Development Plan and pushed hard for its implementation,” said Tau.
Joburg City manager Trevor Fowler said words used by Moody’s, now, and Fitch Ratings Agency in December, to describe the prudence with which the finances were managed, were humbling. “It’s important to stress that Joburg is a city least dependent on national government grants as we generate a bulk of our own finances,” said Fowler.
During the 2015 financial year, the City invested R10.2 billion on capital infrastructure – an increase of 3per cent from 2014.
This dual rating upgrade comes hard on the heels of another upgrade of the City by Fitch Ratings in December.
The benefit of this dual upgrade is that credit spreads on the City’s listed bonds should become narrow and make them more attractive to investors while simultaneously lowering the cost of new debt incurred to fund capital expenditure.
Details: City of Joburg, 011 407 6477.
Related articles:
The city of Joburg is under construction
